Self Insurer May 2020

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balance Experts in coverage solutions for single entities, groups and public entities, our integrated approach gives self-insureds greater stability and control over their self-funded plan. Unparalleled underwriting expertise, innovative risk management and in-house claims management, work in sync and in perfect balance for best possible outcomes.

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MAY 2020 VOL 139

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The Self-Insurer (ISSN 10913815) is published monthly by Self-Insurers’ Publishing Corp. (SIPC). Postmaster: Send address changes to The Self-Insurer Editorial and Advertising Office, P.O. Box 1237, Simpsonville, SC 29681,(888) 394-5688

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PUBLISHING DIRECTOR Erica Massey, SENIOR EDITOR Gretchen Grote, CONTRIBUTING EDITOR Mike Ferguson, DIRECTOR OF OPERATIONS Justin Miller, DIRECTOR OF ADVERTISING Shane Byars, EDITORIAL ADVISORS Bruce Shutan and Karrie Hyatt, 2018 Self-Insurers’ Publishing Corp. Officers James A. Kinder, CEO/Chairman, Erica M. Massey, President, Lynne Bolduc, Esq. Secretary

MAY 2020



in the







Written By Bruce Shutan


he coronavirus pandemic has sparked record-breaking unemployment claims in the U.S. as the world economy nearly ground to a halt. But actuaries, third-party administrators, stop-loss carriers and benefit brokers have been working overtime in fuzzy slippers, no makeup and 5 o’clock shadows to help restore order across the self-insurance community. Together, they’re projecting claims, sharing cautionary tales, forecasting market corrections, suggesting public-policy tweaks and identifying bright spots along the treacherous road to handling COVID-19, an acronym that stands for coronavirus disease of 2019. “We’ve had anything from the Spanish flu 100 years ago to the swine flu, Zika, Ebola and SARS, so this is probably not the last epidemic that we will have,” observes Keith McNeil, co-founder of Arrow Benefits Group (ABG), which is part of the TRUE Network of Advisors owned by Patriot Growth Insurance Services. His email signature reflects a sign of these troubled times, prompting clients to click on a link for important updates and notifications regarding COVID-19.



New World Order

Hobson D. Carroll

Hobson D. Carroll, an actuary and president of MedRisk Actuarial Services, Inc., describes the pandemic as “an aggregate event as far as the stop-loss is concerned” and doubts medical claims will have a major impact. For example, if everyone in a 100-life group with a $1 million in medical spend got tested for COVID-19, the tab would be only about $6,500. Also, he notes that there might be just one or two cases in this hypothetical group that rack up $30,000 or $40,000 from an intensive-care hospital stay.

The pandemic has fundamentally reshaped how one TPA’s members navigate the health system. “There is an oversaturation and lack of resources at medical facilities,” reports Kari Niblack, CEO of ACS Benefit Services. “As the disease spikes, we anticipate higher utilization and costs for COVID-19. However, we are also anticipating a steep reduction, temporarily, in near-term utilization in costs for the backlog of procedures that are currently suspended.” From a data-analytics standpoint, she cautions against adopting a false sense of security with other higher-cost services being temporarily suspended. “A good consultant will see that coming,” she says. “You’re just seeing a shift in how costs are being incurred right now. I don’t yet see a long-term new type of design with plans.” Indeed, data analytics and experienced client-centric consulting are key for selffunded clients, according to Niblack. But as previously stated, she says not bank on pandemic savings since “a spike may occur at the end of the year in suspended, higher-cost plan expense categories.”

PROCEEDING WITH CAUTION COVID-19 will likely usher in a wave of conservatism and consolidation among stoploss carriers, predicts Mehb Khoja, an actuary and president of Medical Risk Managers (MRM), a stop-loss carrier, who has written extensively on the pandemic. Key elements of the emerging approach will include stricter disclosure process, along with less use of early locks, rate caps and profit share or dividend products. Mehb Khoja

“Most of the stop-loss industry is going to take a risk-averse approach and say, ‘we need to increase our rates and use higher trends,’” he says.

“We may need to load up certain thresholds of deductibles in order to protect the plan from adverse claims activity.” While working on 7/1 and 8/1 policies, Khoja believes carriers may change their conservatism by 9/1 or 10/1. Until then, it’s a guessing game. “Nobody knows when the curve is going to flatten and all of this is going to end,” he adds. Whatever the outcome, there likely will be consolidation among the roughly 100 external stop-loss carriers and regional health plans that provide stop loss. While some players will exit the market, Khoja believes others will “try to right the ship.” A significant reduction in profitability for carriers over the past five or six years under the Affordable Care Act (ACA) has blown up the stop-loss market and doubled its size in terms of premium volume, he observes. However, Khoja doesn’t believe COVID-19 costs pose an issue to stop-loss carriers. While those costs will dent self-insured plan sponsor budgets, he doubts it will affect aggregate stop-loss thresholds of 120% or above or spec of $50,000 or higher. In one of several recent blogs on the pandemic, Carroll suggested that no cost-sharing be applied to any COVID-19 diagnostic testing or treatment in exchange for all providers accepting a modest rate pegged to Medicare, which would make it as simple as possible to administrator.

MAY 2020


New World Order

If I only have to cover 100% or even 150% of Medicare, I’m probably coming out ahead, not having to collect the cost sharing,” he explains, “

noting that 140% of Medicare is cost-

“But then the hospital doesn’t have to chase the cost sharing. There is no balance billing.”

neutral for hospitals.

Carroll also recently proposed a fourpoint solution for the payment of COVID-19 treatment in the U.S. Under this approach, he urged every patient,

provider and payer to work together in search of an efficient solution. Other elements include fairness (i.e., no out-of-pocket expense or balance billing), reasonableness (i.e., all claims will be paid on a uniform basis) and administrative efficiency (i.e., if the payment basis is known upfront, then the payment cycle will be streamlined).

CLIENT CONCERNS Many employer plans may see an impact from COVID-19 as early as April and possibly even through July. For Carroll, the actuarial challenge is reflecting any impact on the stop-loss insurance that’s protecting those plans back on 12/31/19. It all went sideways for him when he recently was about to sign off with the usual mundane approach for one of his clients. The large entity, which absorbs significant risk on the business they underwrite and place with issuing stop-loss carriers, realized there should be some impact on the reserves that they would have normally held. “That increased by a percentage that was not immaterial, but they agreed that it was appropriate,” he reports. “I had to create a model out of nothing. We’ll see what the regulatory authority says after they read my report.”

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MAY 2020


New World Order Several Khoja clients have had knee-jerk reactions to the pandemic in which they have considered “inflating the trend at levels above where we would suggest,” according to Khoja. Two are based in the New York area, the U.S. epicenter of COVID-19. The pandemic is producing a steep learning curve for some consultations. A long-term ACS client in higher education, for instance, was wondering whether it should count students who are working for the university in a grant situation. While acknowledging that the answer was difficult to find, Niblack used her background as an attorney “to really dig in and help that client on that individual question.”

CONTINUATION OF BENEFITS AND TELEHEALTH Concern is mounting over COVID19’s longer-term impact on health insurance coverage. McNeil recalls when employers temporarily subsidized COBRA premiums under the American Recovery and Reinvestment Act of 2009. While he doesn’t expect that to happen again given how the ACA significantly affected COBRA, it wouldn’t surprise him if history repeats. “With all the talk in Washington about even more relief acts, that could easily be one of them,” he says. Many employers recently have sought to continue health benefits for hard-hit employees – something Khoja says is “more of an adjustment to benefits eligibility” than a COBRA case. “I think you’ll see a lot of that happen with employers that are kind of cash strapped right now and needing to shrink given the times. I see that being something



that gets amended for 90 days and will not last forever.” While stop-loss carriers often require monthly premium payments by the first of each month with a grace period of a week, Khoja expects more flexible arrangements in the months ahead. For example, additional grace periods could be extended from 30 to 90 days to allow plan sponsors additional time to pay. Although telehealth has been around for quite some time, many employers have seen fairly low utilization. But the use of digital platforms already has skyrocketed in these uncertain times and the future bodes well for further growth that will drive down costs. “The reality is, the cost of that service is cheaper than a member going to the doctor,” Khoja explains. “If this becomes the new norm where people are using telehealth more, I don’t think that’s a bad thing. I think that’s a positive outcome.” With much higher and necessary utilization of turbo-charged telehealth, Niblack believes there will be a greater and sustained utilization pattern post-pandemic. She says patients will become Keith McNeil increasingly accustomed with virtual care, noting that Millennials already are comfortable with technology being applied to health care. The enormous amount of data that will be gathered from telehealth during this pandemic will offer self-insured health plans and their partners a chance to mine that information for future best practices, according to Carroll. Many elective procedures will be deferred and some may not even ever happen. “You don’t hear that spoken about much,” Khoja says. But perhaps the biggest silver lining in the pandemic’s ominous dark cloud is “we’ll get less sick over time because we will, to a certain extent, always maintain social distancing,” he foresees. “We will constantly be washing our hands and using hand sanitizer. And the result of that is we’ll probably have less flus and other sicknesses that can spread from one person to another.” With unemployment at a half-century low in a humming economy at the turn of a decade, McNeil says paying too much for health insurance wasn’t necessarily

“But now the economy flips around, and more than ever, maybe employers should care and be willing to get out of their comfort zone; look beyond just the norm they’ve known for the last 25 years,” he suggests.

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New World Order NEW WAYS TO WORK The pandemic has dramatically altered the workplace in ways no one would have imagined prior to March. There have been a few logistical challenges at ABG, which employs about 40 people. For example, a staffer had to sort snail mail at the office, scan and email certain documents. All but two of MRM’s 61 employees are all working from home with access to a computer, WebEx and Zoom except for two people. The only ones in the office are from IT and general administration and office management. Khoja says his foot soldiers are so enthused by the video conferencing platforms that they’re hoping to use them to stay in touch with family members, describing it as “a nice little byproduct of all of this.” ACS prepared well for the current crisis because of a year-round, businesscontinuity plan to deploy all necessary technology setups. That enabled its approximately 125 employees to work from home and still give clients the individual attention and consulting they now desperately need. Niblack’s team helped not only amend health plans, but also develop a strategic understanding of any new approaches that were pursued. “Where before we may have gone to a client’s place of business for quarterly plan meetings or a broker’s office to discuss a particular client, we’ve got to use technology to get creative about still delivering that personalized touch and being able to quickly synthesize data and give recommendations,” Niblack suggests.



On a lighter side, ACS staffers have enjoyed learning more about each other’s families and pets while away from the office but virtually connected. “We love our animals very much,” she exclaims. “We know that they enrich our lives, and my orange tabby cat, whose name is Sir Jeffrey, is our official company mascot. We’ve gotten quite a kick about what’s Jeffrey doing with mom at home now all the time. I put in my notes that Jeffrey can tell you all about topline growth and mom’s hub at the dining room table.”

Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.

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Weeding Out Waste


Weeding Out



n estimated 30% of all health care spending is deemed wasteful. And with pharmaceuticals long representing the fastest-growing portion of self-insured health plan costs, it’s not surprising that a waste-free formulary was finally developed to manage that soaring tab. Industry observers consider this novel approach a great way to prune low-hanging fruit and save on costs but also a means to rethink relations with traditional pharmacy benefit managers. Indeed, PBMs have become a lightning rod for criticism over rebates on inflated scripts, opaque spread-pricing arrangements and conflicts of interest with drug manufacturers. They also have been taken to task for a lack of accountability on adequately reining in an employer’s drug spend. These gripes have seen the creation of “transparent” or “fiduciary” PBMs that only charge a modest administrative fee per script. They have been lauded for being far better stewards of prescription drug benefit plans. Many formulary drugs cost more than they should because large PBMs are making money on them, explains Lauren Vela, senior director of member value for the Pacific Business Group on Health.



Weeding Out Waste ‘A NO-BRAINER’ More than two years ago, PBGH researched the impact of contracts that 15 self-insured employers had with the nation’s three largest PBMs, which are Express Scripts, CVS Caremark and OptumRx. The results were eye opening. An August 2019 PBGH Issue Brief on wasteful spending in pharmacy benefit plans noted that Lauren Vela $63 million in annual savings were possible among those plan sponsors it examined just by reducing the use of high-cost, low-value drugs. Under this calculation, which represented anywhere from 3% to 24% of overall pharmacy spending, 6% of claims analyzed were deemed wasteful. They included 868 scripts from 71 drug groups. Until that study financed by the Commonwealth Fund was done in conjunction with Integrity Pharmaceutical Advisors, Vela didn’t fully understand just how badly the traditional PBM business model was affecting drug spend. While ridding formularies of wasteful drugs doesn’t necessarily have the biggest impact relative to other Rx solutions, Vela says it might be the easiest of all steps, adding “it’s sort of a nobrainer.” But that transition may not always be a smooth one. In adopting a waste-free formulary, she cautions that there could be some pushback from health plan members who are unhappy if drugs they’ve been prescribed are no longer covered. Another scenario is fear of smaller rebates.

Moreover, many PBGH members have been told by their PBM or consultant not to worry about the formulary misspending dollars. When this happens, she advises them to request in writing which of the drugs with a questionable track record are actually on their formulary and how much they’re being charged for them. As a result of these efforts, some PBGH members are interested in replacing their PBM entirely, while others are pressing their PBM to be more accountable. There’s also resistance to change because of longstanding relationships with big-three players, fearing that such a move would be too risky. Vela found it interesting that PBMs now offer low net cost formularies, but even so, she’d like to see more of her members give fiduciary PBMs a try. As part of its quest to root out formulary waste in favor of drugs with proven clinical utility as well as lowcost alternatives, PBGH incorporated recommendations from the Institute for Clinical and Economic Review. Several algorithms also were used to evaluate medications. Drugs that were excluded from PBGH’s waste-free formulary include Absorica, a vitamin A derivative to treat acne; Dexilant, a proton-pump inhibitor, and Glumetza, an extended-release formulation of metformin. All were considered wasteful or lowvalue and fell into four categories. They included so-called me-too scripts involving immaterial tweaking of a particular ingredient, combination drugs that fuse two active ingredients into one pill, over-the-counter equivalents

MAY 2020


Weeding Out Waste and brand names that are used when generics are available. Combo drugs may be particularly hard to swallow for some health plan sponsors and members alike. Terry Killilea, Pharm. D., SVP of clinical/fiscal integration at USI Insurance Services, recalls how a large client in Texas saw the cost of a product used to treat a variety of skin conditions skyrocket out of the blue from $700 per month to about $50,000 to $60,000 a month. “The only unique thing about it was it was a combination of two OTC products,” he says. In crafting a vigilant drug list, Killilea explains that some PBMs may recommend that new products not be covered for six months until safety is proven and there’s an evidence-based assessment of their clinical value. While describing the waste-free formulary as a catchy moniker and nice marketing term, he says it’s not a new practice and, in fact, dates back 30 years into his own career. “Any good PBM operation or prescription plan will pretty much have that addressed already,” he adds, noting that it’s not as much Rx performance as avoidance of certain scripts. Saying he’s a biochemist at heart, Killilea requires a fiscal regiment on pricing alongside “some validation that there’s clinical assessment... We don’t make the decisions, but we certainly push the PBMs to apply rigor.”

KEEPING COPAYS MANAGEABLE A similar Golden State success story has been unfolding for several years. The Self-Insured Schools of California (SISC)



implemented a waste-free formulary in partnership with Navitus Health Solutions, a transparent PBM, and Integrity Pharmaceutical Advisors. Featuring lowest net cost scripts and transparent pricing to reduce wasteful spending, it achieved a significant reduction in cost trend and per-employee-per-month savings with minimal member disruption. With the Rx portion of renewals growing an average of 11.7% annually between 2010 and 2014, SISC decided to lower net pharmacy cost instead of maximizing rebate income. It also sought a PBM committed to transparency vs. being focused on driving use of its own mail-order pharmacy. The waste-free formulary it adopted rooted out 600 drugs, including Treximet, a migraine medication composed of two old drugs. Although that script’s individual ingredients prescribed separately cost just $7.31, the after-rebate cost was about $219.

“By removing waste, we are able to maintain low member cost-sharing, which gives members affordable access to the therapies they need,” explains John Stenerson, SISC’s deputy executive

“Our copays average $4.30 for generics and $26.54 for brands.” officer.

John Stenerson

He says the formulary’s drugs are safe and just as effective as the ones that have coverage restrictions and also help improve lives. In the face of government inaction on this issue, Stenerson believes “it’s up to us to stay vigilant and diligent about promoting value and attacking the waste in the system.” SISC, which was established in 1979, pools resources across school districts to secure affordable and sustainable health benefits coverage for 330,000 employees and their families at more than 400 school districts in 43 counties in California. Suzanne Delbanco, Ph.D., executive director of Catalyst for Payment Reform, lauds SISC for the way it communicated the waste-free formulary in advance and built in a transition period. “They were very sensitive to how this can be perceived by plan members and really thoughtful about how much time they each might need to adapt to the new set of prescriptions,” she says. Catalyst for Payment Reform’s website touts a May 2019 case study on SISC’s experience, which can serve as a model for other self-insured entities.

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Weeding Out Waste APPROPRIATE MEDS AND DOSAGES Better formulary management not only makes drugs more affordable, it also can improve adherence and health outcomes. “There’s mounting evidence that people refrain from seeking care when they perceive it to be too expensive, especially for people who are on drugs for chronic conditions,” Delbanco reports.

Mike Case Haub

But a closer look at longstanding practices may reveal unintended consequences.

“Everybody’s really focused on medication adherence,” says Mike Case Haub, PharmD, CEO of CHC Health. “But the research has shown that we’re spending or wasting about $528 billion a year on non-optimized drug therapy. That means that it’s not necessarily an adherence issue.” The real problem, he explains, is with patients not being on correct medication or dosage. Physicians might prescribe a particular script because the patient is having an adverse reaction to another medication, which can become a house of cards. For every Rx dollar spent in the U.S., about $1.15 is spent to reverse the effects of medication, Case Haub reports, resulting in a negative return on investment on drug therapy. More than half of patients are readmitted to hospitals within 30 days because of a medication-related issue, he notes, and oftentimes no one is managing their prescriptions. “They might come into the hospital on 15 meds; they go home on 15 new meds, and then they get home and wonder if they take all 30 of these meds,” he says. The solution is having clinical pharmacists becoming actively involved from an education standpoint and helping manage coordination of care, explains Case Haub, whose firm on average finds at least three significant issues with a patient’s medication. His approach involves unbundling pharmacists from pharmacies. “Our pharmacists are in a telehealth or virtualized situation,” he says. “We’re not in a pharmacy filling prescriptions and distributing product.”

Jim Lewis

Over-prescribing medication has precipitated the need for more judicious formularies, according to Jim Lewis, founder and CEO of Predictive Health Partners whose firm



recently formed a strategic partnership with CHC Health to provide medication management services. Considering how some patients seek multiple scripts from several different doctors or pharmacies in any given year, he’s deeply concerned about the effect on adverse drug events (ADE). Cutting the number of ADEs in half would not only prevent about 2.3 million hospitalizations nationwide, but also save 74,000 lives and $30 billion. That conclusion was drawn in an April 2019 Lown Institute report that also noted it would reduce the number of outpatient visits for ADEs by 37 million in the coming decade.

“We can literally go out, engage individuals who are at high risk of having an adverse drug event, and the reason that they would want to talk to us is that they’re wasting money,” he says. “They don’t need to be on six, eight or ten prescriptions.” Another point to consider about the waste-free formulary concept is that with new drugs constantly in development or coming off patent, the list of approved scripts will change on a regular basis. “It’s something that you have to remain vigilant about and continually search for opportunities to make those decisions about the formulary,” Delbanco says.

Weeding Out Waste Given the focus of her organization, she believes the best opportunity to reform Rx payment is to package together pharmacy and medical costs with incentives for

“If a group of providers is being given responsibility to adhere to a budget for a given population,” she suggests, “they will make judicious decisions about when to use pharmacy and medical care, and how to keep the costs as low as possible by using the best combination.” providers to spend as efficiently as possible.

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Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 30 years.

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he Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal health benefit mandates (e.g., the Mental Health Parity Act, the Newborns and Mothers Health Protection Act, and the Women’s Health and Cancer Rights Act) dramatically impact the administration of self-insured health plans. This monthly column provides practical answers to administration questions and current guidance on ACA, HIPAA and other federal benefit mandates. Attorneys John R. Hickman, Ashley Gillihan, and Carolyn Smith provide the answers in this column. Mr. Hickman is partner in charge of the Health Benefits Practice with Alston & Bird, LLP, an Atlanta, New York, Los Angeles, Charlotte, Dallas and Washington, D.C. law firm. Ashley Gillihan and Carolyn Smith are senior members of the Health Benefits Practice. Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner’s situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation. Readers are encouraged to send questions by E-MAIL to Mr. Hickman at




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CORONAVIRUS IMPACT ON HEALTH BENEFITS: A DEEPER DIVE Congress enacted a flurry of new law impacting health benefits in response to the coronavirus. Congress enacted the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid Relief and Economic Security Act (the “CARES Act”). The tri-agencies followed with additional FAQ guidance clarifying the impact of these laws.1 This FAQ guidance clarifies the scope of the FFCRA and CARES Act requirements.

The following addresses the tri-agency FAQs as well as other health and welfare related issues arising during this pandemic. Things are very fluid and further guidance will undoubtedly be issued. More to come.


What services do the FFCRA and the Cares Act require health plans to cover? Beginning March 18, the FFCRA, as amended by the CARES Act, requires group health plans and health insurance issuers to provide the following services without cost sharing or imposition of prior authorization and other medical management limitations through the end of the public health emergency declared by the Secretary of HHS (which is currently set to end on June 14, 2020):

• In vitro, the FDA approved diagnostic products (“diagnostic testing”) to determine if you have COVID-19 or the virus that causes the illness (SARS-CoV-2) and the administration of that diagnostic testing. This coverage includes both kits and lab-developed tests (LDTs) that are used to test—not just the physical kit itself. Covered tests include:

o Tests approved, cleared, or authorized under section the Federal Food, Drug, and Cosmetic Act;

o Tests where the developer has requested, or intends to request,

emergency use authorization under the Federal Food, Drug, and Cosmetic Act, unless and until the emergency use authorization request has been denied or the developer of such test does not submit a request under such section within a reasonable timeframe;



o Tests developed in and

authorized by a State that has notified the Secretary of HHS of its intention to review tests intended to diagnose COVID–19; or

o Other tests that the

Secretary of HHS determines appropriate in guidance (“diagnostic testing”).

Subsequent tri-agency FAQs clarify that approved serological tests for COVID must be covered as well.

• Items and services furnished to an individual during healthcare provider office visits (which includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of a diagnostic testing product described in paragraph (1), but only to the extent the items and services relate to the furnishing or administration of the product or to the evaluation of the individual for purposes of determining the need of the individual for such product (“related services”). As noted in the FAQs, if the treating physician orders an influenza and/or blood tests in an attempt to rule out COVID-19, but ultimately orders the COVID-19 test, the influenza and blood tests, along with the cost of the office visit, would also have to be covered without cost share.

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To which group health plans do the diagnostic testing and related services requirement apply?

The FAQs clarify that the testing and related services requirement applies to all group health plans that provide minimum essential coverage, including grandfathered health plans. The FAQs further clarify that the testing and related services requirement do not apply to the following:

• If the plan or issuer has a negotiated rate with such provider in effect before the public health emergency declared under section 319 of the PHS Act, such negotiated rate shall apply throughout the period of such declaration.

• If the plan or issuer does not • Excepted benefits • Short Term Limited Duration Insurance • Retiree only health plans

Also, the FAQs clarify that testing provided through an EAP that is otherwise an excepted benefit will not cause the EAP to cease being an excepted benefit.

Can the plan limit its coverage of testing and related services to in-network services? No. The CARES Act clarified that the required testing services described in the FFCRA shall reimburse the provider of the diagnostic testing as follows:



have a negotiated rate with such provider, the plan or issuer shall reimburse the provider in an amount that equals the cash price for such service as listed by the provider on a public internet website, or the plan or issuer may negotiate a rate with the provider for less than such cash price. The CARES Act also requires providers of diagnostic tests for COVID-19 to make public the cash price of a COVID-19 diagnostic test on the provider’s public internet website. Failure to post the price on the public website can result in a $300 per day penalty on the provider.

Are plans required to provide treatment beyond covered testing and related services without any cost share or medical management limitations? No. Plans are not required to cover treatment beyond diagnostic and related administration expenses. Plan sponsors that wish to provide coverage for treatment of COVID-19 without cost sharing may do that. In some cases, if the plan is fully insured, state-law requirements may impose coverage requirements in addition to those required by the FFCRA. Plan sponsors should consult with their insurance carrier about what is required for fully insured plans. For self-insured plans with stoploss insurance, plan sponsors should consult with their stop-loss insurance carrier before providing coverage beyond that required by the FFCRA and CARES Act.


Will HSA eligibility be lost due to the extension of benefits for COVID-19 testing and treatment (including those required by the FFCRA) for employees who are otherwise eligible for an HSA? No, the IRS indicated in Notice 2020-15 that otherwise-eligible employees will not be disqualified from HSA eligibility solely because a plan provides benefits for COVID-19 testing and treatment before satisfaction of the deductible. It should be noted that while the FFCRA is limited to COVID-19 diagnostic testing and services, the HSA guidance would extend to treatment for COVID-19 as well.

Will HSA eligibility be affected if telehealth (or other remote care) benefits are provided before an HDHP deductible is satisfied for those employees otherwise eligible for an HSA? No. Section 3701 of the CAREs Act specifically allows telehealth (and other remote) services for any diagnosis to be provided below the minimum HDHP deductible for plan years commencing on or before 12/31/2021.

Likewise, the IRS issued Notice 2020-15, which allows HDHPs to provide services for COVID-19 related testing and treatment prior to satisfaction of the deductible without disqualifying employees from HSA eligibility. Unlike the CAREs Act telehealth provisions, the relief provided by the IRS notice does not have a sunset date.

Do you aspire to be a published author? We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world. The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984. Articles or guideline inquires can be submitted to Editor Gretchen Grote at ggrote@ The Self-Insurer also has advertising opportunties available. Pleae contact Shane Byars at sbyars@ for advertising information.

MAY 2020


Will non-grandfathered health plans have to provide other COVID-19 related coverage?

Beginning March 27, non-grandfathered group health plans must provide coverage for “qualifying coronavirus preventive services”. Qualifying coronavirus preventive services include the following preventive and vaccination services:

• an evidence-based item or service that has in effect a rating of ‘‘A’’ or ‘‘B’’ in the current rrecommendations of the United States Preventive Services Task Force; or (B) an immunization that has in effect a recommendation and

• from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved.

Unlike other recommended preventive treatment services under the ACA which must be covered by the first day of the plan year that begins at least 12 months after the date a preventive service is recommended by the applicable agency, the qualifying coronavirus preventive services must be covered within 15 days of the USPTSF’s or CDC’s recommendation.

How did the CARES Act change the requirement that a prescription be obtained for an over-the counter (OTC) medical expense to be eligible for tax free reimbursement under an FSA, HRA, or HSA? Section 3702 of the CAREs Act reversed the ACA requirement that an OTC drug be prescribed to receive tax free reimbursement under an FSA, HRA, or HSA. In addition, menstrual products qualify as an eligible medical expense. These changes are effective retroactively for expenses incurred (for an FSA or HRA) or for funds distributed (for an HSA) on or after January 1, 2020. Employers should consult with their tax and legal advisers to determine if an amendment is required for their plans and whether a retroactive amendment is permissible.

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What other benefit-plan-related issues should plan sponsors consider? There are several other situations arising as a result of this pandemic that affect group health plans, such as:

• Furloughed employees: Check your plan to see if coverage eligibility is lost


as a result of a furlough. If it is, furloughed employees would likely be eligible for COBRA. If you want to provide free or subsidized coverage to furloughed employees and your plan is fully insured or you have purchased stop-loss insurance, you should consult with the carrier before amending your plan to provide such coverage. Impact on ACA employer responsibility requirements: Employers should monitor the impact of any employment and coverage changes on compliance with the IRC 4980H “employer responsibility” requirements. Where the “look back” method of compliance is used, full time employees who remain employed but have no paid compensation would generally retain their full time status affecting compliance with IRC 4980H(a). In addition, in some cases, an extended furlough may result in a reduction in W-2 wages that could impact the overall affordability of coverage for purposes of IRC 4980H(b). Continued coverage during paid leave under the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act: The FFCRA also requires paid sick leave and expands Family and Medical Leave Act (FMLA) protections for affected employees of employers with less than 500 employees. The employer’s paid leave policies and the FMLA’s benefit plan continuation requirements would presumably apply. For a summary of the FFCRA’s paid sick leave and expanded FMLA provisions, see “Employee Leave Requirements Under the Families First Coronavirus Response Act.” Various federal tax credits may fund some or all of these leave requirements (including the cost of health care). Health FSA election changes: So far, the IRS has not provided relief from the Section 125 election change requirements. Consequently, changes made to the health plan in response to the COVID requirements or otherwise would not likely permit a health FSA election change; however, in many cases, an employment status change may trigger an election event. Other areas of health FSA administration should be analyzed as well. For example, employers may amend their plans to extend the run-out period for claimsfiling purposes. An extension of the permitted grace period beyond March 15 or increase in the $500 health FSA carryover would, however, take further agency action. Dependent care FSA election changes. During this time, many employees are required to work from home. Also, many daycare facilities may be closed temporarily. These events will impact the need for daycare funds, resulting in a need to change elections. The Section 125 election change rules provide significant flexibility for employees to change their dependent care FSA elections because of changes in work or daycare status.


• Commuter benefits: Employees do not necessarily lose pre-tax salary reductions for parking or transit that were made before being required to work from home. The Section 132 regulations allow funds to carry over each month. Also, commuter salary reduction elections may be changed more frequently than under Section 125. Section 132 allows employees to reduce their pretax salary reductions to $0 while working from home. This should enable most employees to use any unused salary reductions when they return without accruing a surplus.

References: 1 ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-42.pdf



Written by Karrie Hyatt

nterprise Risk Captives (ERCs) have been under fire from the Internal Revenue Service for much of the last decade with no indication of a cease fire. To help combat the wrong perceptions held by the IRS, SIIA is moving ahead with a forward-thinking engagement strategy—the creation of a new narrative that talks about needs and success stories. To get this new initiative started, the organization has created the Captive Advocacy Task Force to bring a positive message to the ERC marketplace.


ERCs are captives that serve small to medium-sized companies and, in most cases, take the 831(b) tax selection made available as part of the US Tax Code. This sector of the captive industry has seen the largest expansion in the last ten years and the IRS suspects that some companies have been using the 831(b) election as a tax dodge for estate planning and wealth transfer purposes.



“Because of the IRS’s undue scrutiny, pressure and aggressive tactics towards ERCs, people are only hearing bad things. And because the ERC captive is a relatively novel idea, some folks have been skeptical of them since their origination ten or fifteen years ago. You hear the crazy stuff about people misusing captives— like buying hurricane insurance in Montana—and things that are clearly not applicable to their business. We know that’s a small minority of cases,” said

With this Code, the association hoped to take a proactive approach to answer any lingering questions about the validity and effectiveness of captives.

Yet, the IRS is increasingly focusing on 831(b) captives. “Five years after introducing captive insurance programs to the Dirty Dozen list and four years of collecting information from hundreds of thousands of taxpayers, the IRS has not provided any guidance on properly structured captive insurance programs,” said George M. Belokas, vice president and actuary with GPW and Associates, Inc. “Instead the IRS issued IR 2019-157 in 2019 and IRS Letter 6336 in 2020 indicating the IRS is increasing audit activity to anyone that is reporting their participation in a [ERC] insurance transaction”

Belokas continued, “Captives are being scrutinized based on their tax implications and not by their powerful use as a lifeline to their insured companies and owners providing much needed coverage for risks that are not well managed by the commercial insurance market.”

“Our affiliates and competitors face the same challenges we do. While none of us objects to or opposes proper efforts by the service to ferret out anyone who is not complying with the law, Congress should be taking notice of any government agency that may be undermining the fundamental legislative process embedded in our Constitution, ” said Susan M. Euteneuer, general counsel and chief compliance officer for Oxford Risk Management Group.

Jeffrey K. Simpson, partner with Womble Bond Dickinson (US) LLP.

SIIA has been at the forefront in trying to boost the reputation of ERCs. Their captive committee has been advocating on behalf of ERCs for years and just last year released the Captive Manager Code of Conduct—a document meant to guide captive managers to a high standard of ethical conduct and to help strengthen the reputation of the captive industry.

MAY 2020


Last September, the IRS, emboldened by three key wins in the US Tax Court, issued a settlement offer to around 200 captives that were then under audit. The captives who received and accepted the offer were required to pay penalties and to concede a substantial portion of the tax benefits that they previously claimed. This offer indicated to much of the ERC community that the IRS had no intention of letting up its pressure on captives.

While the IRS is focusing on smaller 831(b) captives, the pressure they are applying to this segment has ramifications in the larger captive marketplace.

“Unfavorable court decisions in the ERC segment can have an impact on captives universally,” said Simpson. “There are a lot of people and businesses who benefit from these captives and who want to be able to keep doing it. The big story here is about the risk management that ERCs provide their owners, not the tax benefit that the IRS thinks it’s about. It’s a small segment of the industry, but an important one.” “The IRS has focused its scrutiny on nearly all Captives making a tax election under IRC section 831(b) [of the US Tax Code] which disproportionately impacts captive insurance companies protecting America’s small and medium sized businesses,” said Belokas. However, the IRS’s arguments and actions have far reaching implications for nearly all captives.”

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In the fall of last year members of SIIA’s Captive Committee and general members involved with ERCs decided to form a group that would directly address advocacy for ERCs. According to

“The Task Force is really about demand. SIIA has been active in the captive space and the ERC space, but [members] who were “We want to get in front of the bad press about ERCs,” said Ryan Work, the vice involved wanted to do more. president of Government Relations with SIIA who is working closely with the Task “We want to take charge of the narrative surrounding legitimate captive Then there were people who Force. structures and to make sure that policymakers are getting the right information.” wanted to get involved. As things got more intense with The vast majority of ERCs are operating within regulatory boundaries and are not the IRS, it became evident abusing tax code section 831(b). According to Belokas, “To ensure the continued operation and stability of America’s small and medium-sized businesses, the captive that we needed to do more, insurance industry needs a strong and unified voice to help change the tide. The Task so we formed the Task Force Force is that voice.” to address the issues and The Captive Advocacy Task Force began the year with several in-person and to give people a forum, a teleconference meetings. The aim is to create a wholistic message that all parties can channel to advocate for their use to get their stories out. One of the primary ways that the group intends to take hold of the ERC narrative is to take captive success stories, particularly those told by industry.” owners, to policymakers. Simpson,

The Captive Advocacy Task Force was organized with the intention to take the stories of successful ERCs to the forefront of the conversation with policymakers, regulators, and other interested parties. According to Simpson, “The objective from the outset has been to change the discourse.”

It is important that policymakers—especially on Capitol Hill—understand what captives are and how they support business function. “Members of the Captive Advocacy Task Force have volunteered to help educate policymakers regarding what captives are and how they work, to explain some of the challenges the industry has faced, and to make clear the adverse impacts on the national economy if the self-insurance vehicles that Congress legislated into existence are instead drummed out of business,” said Euteneuer.

MAY 2020


She continued, “Policymakers must determine how to support the IRS in its important mission, while not derailing valuable businesses from obtaining the insurance and financial security they need. It is one of the most important roles of Congress to strike the appropriate balance between these different needs. The Task Force is working to provide policymakers with information to help them in navigating that role.” “The Task Force hopes to educate both Treasury and the IRS on how to identify proper captive insurance structures, change their misguided presumption that most or all captives are abusive, and assist in providing guidance to business owners with captives,” said Belokas. “With proper guidance business owners will have the confidence they need to form a captive to protect their business without worrying they may have inadvertently increased their risk of an IRS audit or the fees and penalties that may be imposed to argue their structure.”

“Enterprise risk captives offer insurance for risks that are either unavailable or not commercially feasible with traditional insurance products,” said Euteneuer. “The IRS has, through its recent court successes, told three stories of noncompliant captives. Those stories do not begin to scratch the surface of the industry. The benefits of compliant captives in this space are well-illustrated with two current, major challenges with traditional insurance—the hardening market and global COVID-19 issues.”

According to Simpson, if the Task Force can start talking about ERC success stories it will highlight the benefits of these structures while showcasing how they work

“As horrible as the coronavirus is for all of us, it might be a good thing for ERCs and captives. It gives ERCs an opportunity to show what they are built for—the kind of low frequency/high severity event that disrupts businesses in uncommon ways like this pandemic has.”

when they are structured properly.

Belokas, through his work with GPW and Associates, relates how their clients have been benefited by insuring through an ERC. “We have a client which relies on a farming operation in Florida that was devastated by Hurricane Michael in October 2018. The amount of loss reimbursed through their captive insurance program was in excess of $750,000.

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Another client manufactures animal feed supplements in Texas and in 201516 experienced a severe shortage of a crucial component necessary to make their supplement. The amount of loss reimbursed through their captive insurance program was in excess of $400,000.”

“In the absence of a captive insurance program these businesses would have faltered and the over 200 workers they employ could have been left jobless,” continued Belokas. “Individual captive success stories like these are crucial to help change the IRS’s misguided presumption that most or all captives are abusive.”

“The captive insurance industry is at an impasse. If the uncertainty continues or if policymakers are unwilling to support Captives, then this once powerful tool to protect businesses will be dead. The goals of the Task Force have the greatest opportunity for success with the support of SIIA and its membership.” According to Belokas,

Karrie Hyatt is a freelance writer who has been involved in the captive industry for more than ten years. More information about her work can be found at:

The original plan had been for Task Force members and ERC owners to participate in a SIIA-sponsored “DC Fly-In” in late March to meet with policymakers. However, due to COVID-19 the event was postponed. According to Euteneuer, “We had planned to meet in-person in Washington, DC and in district offices, so we are now shifting to alternate means of communication. The message is too important to wait until we can meet in person.”

“The many benefits of self-insurance extend well beyond enterprise risk captives,” continued Euteneuer. “The IRS is currently focusing on 831b enterprise risk captives, doubting that any of this is insurance in the commonly accepted sense. No one with a proper captive structure objects to the service looking for actual noncompliance. Rather, we continue to urge that this inquiry be conducted in a manner that comports with the laws as Congress wrote and intended them.”

MAY 2020


Written By Andrew Silverio



or the last month or so, like just about every industry, self-funded plan sponsors and those serving them have been frantically grappling with how to quickly and thoroughly address issues they’ve never had to encounter before.

Entire segments of our economy have shut down essentially overnight, travel has screeched to a halt, and employers are dealing with questions of a type and scope they’ve never seen. Against this backdrop, individuals’ healthcare needs have never been more vital, while for many employers the path to ensuring they can continue to be covered has never been more wrought with pitfalls.

As self-funding consultants, we’ve already fielded just about any question one could imagine relating to the COVID-19 pandemic.



It is encouraging though, from a human perspective, that the most common questions we’re seeing don’t relate to how to comply with new federal laws, or even how to contain costs in a time when most employers are being forced to tighten their belts dramatically.

Rather, the most common and urgent inquiries we receive are all variations on the same basic issue – how can we ensure our employees can remain covered? This seemingly simple question often gets extremely complicated though, as plan sponsors are dealing with business decisions they never envisioned.

What if you have to close down completely for a month? Two months? What if you have to cut everyone’s hours to be able to ensure everyone continues receiving a paycheck? What if employees are placed on leaves of absence or furloughed? Will stop-loss cover continuations of coverage?

It’s very unlikely that even a well-drafted plan document is already set up to address situations like this. The first and most important item to check off the list is to ensure that the plan document allows for continuation of coverage in whatever situation you’re dealing with. Just how to label that situation has become a point of confusion in itself, however.

Employers are getting hung up on terminology – do we call it a layoff or a furlough? Can we call it a leave of absence? Does this impact actively at work status? Our general guidance has been to forget about terminology – it doesn’t matter.

If your plan clearly describes the events that would otherwise cause a loss of eligibility and clearly establishes that eligibility is intended to continue regardless, it doesn’t matter if the break in service is called a layoff, a furlough, a leave of absence, a pastrami sandwich, etc.

Another significant source of anxiety for plan sponsors is how stop-loss carriers will treat plan changes in connection with COVID-19. Many carriers have issued releases that seem very reassuring – saying in broad terms that plans need not worry, and that stop-loss will honor

MAY 2020


COVID-19 updates and amendments won’t be required of applicable stop-loss policies.

We would caution against taking these representations too broadly, however. A reasonable interpretation of most of these releases is that carriers will honor any plan changes to the extend necessary for plans to comply with the law (namely the Families First Coronavirus Response Ace and the CARES Act).

However, most plans are contemplating changes beyond what’s required by law. For example, to date there is no federal requirement to extend coverage which would otherwise be terminated after layoff or due to a reduction in hours – the only required extension of coverage under these laws would fall under a new category of FMLA leave.

There’s also no federal mandate to waive cost sharing for most COVID-19 treatment, as opposed to diagnostic testing (a step many plan sponsors are taking to mirror trends in the fully-insured world). The prudent approach is to expect collaboration, but not rely on it, and take all the proactive steps that may be necessary to protect the plan and employer.

Andrew joined the Phia Group, LLC as attorney Third Party Liability Lawyer in the summer of 2014, dealing with a variety of issues such as Medicare recovery and Medicare COB, class action recovery, and other opportunities to recoup funds for benefit plans. In addition to conducting research into novel and developing areas of the industry, he expanded his focus into provider relations, dispute resolution, and cost containment. He now serves as the company’s Compliance and Oversight Counsel, handling some of the most complex consulting issues and assisting with compliance and regulatory issues, both internal and external.

Andrew attended Berklee College of Music in Boston, earning his B.A. in professional music. He then attended Suffolk University Law School, graduating with an intellectual property concentration with distinction. There, he took the step into the healthcare realm of the legal world, serving first as an editor and content contributor, and then on the executive board of the Journal of Health and Biomedical Law. Andrew is licensed to practice in the Commonwealth of Massachusetts.






OUTSIDE the Beltway


elf-insurance, particularly self-insured employee health plans, continues to be targeted by an increasing number of states with restrictive laws, regulations or taxation schemes that trespass on ERISA protections. The threatening environment continues to test SIIA’s ability to fulfill its mission to protect and promote self-insurance.

An ongoing state-by-state government relations process has taken SIIA staff and member activists to many state capitals as they advocate for beneficial measures or defend against those that could harm the self-insurance industry.

New York After a multi-year lobbying effort, grandfathered stop-loss policies for groups of 51-100 have been given another extension. SIIA is pleased that the legislature included this with a number of other “extenders” in budget legislation.



OUTSIDE THE BELTWAY As background, instead of permanently extending tax and insurance provisions, legislators generally extend them for one or two years in the New York State budget. While a permanent fix is preferred, SIIA is hopeful that the grandfathered stop-loss legislation can be extended like this in the future.

Massachusetts Senate Docket 2888 has been introduced and would require all smaller business interruption contracts to cover and reimburse COVID. The legislature has a number of co-sponsors and has yet to be assigned to a committee. A coalition letter of opposition has been sent to the Senate President and the Assembly Speaker.

Absent a federal reinsurance program, there are some concerns that this legislation may advance. SIIA will continue to work with allies to oppose it. The appropriate legislative text can be found on pages 239-240 of the Transportation Budget legislation, A.9508B/S.7508-B. You will see that the legislature has extended the grandfather contract period by one year and would permit contracts to be renewed past January 1st, 2021.

New Jersey New Jersey Assembly Member Roy Freiman introduced A.3844 which, like the other bills, requires business interruption coverage to pay COVID-related claims.


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OUTSIDE THE BELTWAY The bill has been pulled from further consideration and, at this time, no action is likely for at least two months. However, the legislator has indicated his desire that the “insurance industry” find a solution to this problem and SIIA will remain engaged on this issue.

New York State Several Assembly Members, none of whom who serve on the Assembly Insurance Committee, have introduced A.10226. SIIA has signed a coalition letter to insurance committee leadership and Assembly and Senate leadership opposing the legislation. The letter will be sent once other coalition partner signatories are finalized.

SIIA understands that, at this time, the legislation is unlike to move. However, as New York State has been heavily impacted by COVID, this legislation will need to be monitored closely. The legislature will adjourn in mid-June

Ohio House Bill 589 has been introduced by two members of the minority party, neither of whom is on the insurance committee. SIIA has been advised that leadership understands the solvency concerns and the legislation appears to be unlikely to advance.



Pennsylvania House Bill 2372 was introduced this past weekend by about 40 members of the House, mostly in the minority party, and no member of the committee of jurisdiction’s majority.

SIIA is still gathering intelligence on the legislation, but the bill will need support from a majority of the insurance committee to advance. It does not appear to have it at this time.

In response to this development, SIIA will be filing a coalition letter of opposition.

Rhode Island Representative Joseph McNamara, Chair of the House Committee on Health, Education and Welfare, has announced that he will introduce COVID business interruption legislation. His press release announcing his intent is here.

As in Pennsylvania, SIIA will be filing a coalition letter of opposition once the legislation is introduced.


COVID STOP-LOSS RESOURCES SIIA is developing a stop-loss resource to help carriers, TPAs and brokers keep track of critical state laws. The chart will note state stop-loss group size prohibitions and small employer contract requirements.

The intent of this resource is to help SIIA members comply with state laws and regulations should a plan sponsor downsize. The chart is currently being reviewed by compliance staff and will be available shortly.

SIIA has compiled a chart of state insurance department bulletins that request or require carriers to allow grace periods for premium payments. Contact SIIA for a copy.

COVID Business Interruption Insurance Legislation State legislators in a number of states have introduced proposals requiring business interruption coverage to pay for COVID-related claims whether the insurance policies included it as a benefit or not. SIIA members have expressed concern that if these laws were to pass, states may attempt to force self-insured risk to cover the benefit too.

Most of the currently proposed bills are aimed at helping only smaller employers with 100 or fewer employees. As of now, no legislator has filed legislation that would require business interruption insurance to cover COVID claims for employers of all sizes.

Responding to SIIA member concerns, SIIA has joined a coalition to fight the legislation and will take additional advocacy steps, beyond sending coalition letters of opposition, as they become necessary.

As most know, pandemics are generally excluded from business interruption coverage, and, in many cases, state or local officials have ordered non-essential businesses to close, causing the “interruption.”



As of now, SIIA has been advised that the two bills of most concern on this topic are being considered in Massachusetts and Rhode Island.

Should you have any or if you would like to alert SIIA of new state legislative and regulatory activity (health care, workers’ compensation and/or captive insurance matters), please contact Adam Brackemyre, Vice President of State Government Relations directly at 202/595-0641, or via e-mail at



Congressman Schweikert


IIA Kicks-Off Virtual Congressional Town Hall Series with Congressman David Schweikert

SIIA recently hosted its first virtual Congressional Town Hall with Congressman David Schweikert, who spoke to SIIA members on health, tax and other top of mind policy issues, including COVID-19 legislative activities and the upcoming 2020 election.Â

Congressman Schweikert serves on the House Ways and Means Committee, which has primary jurisdiction on a number of health and tax issues that are critical to SIIA members, having previously served as the Majority Whip in the Arizona legislature and on the Arizona tax court. Additionally, the Congressman serves on the subcommittees for Tax and Trade Policy where he is an advocate for reducing trade barriers and developing important tax reform.

Among other topics, the Congressman offered advice to self-insured small business owners on how to apply for emergency COVID-19 funding and specific loan opportunities.

MAY 2020


ENDEAVORS Additionally, the Congressman examined the effects of the COVID-19 pandemic on the 2020 presidential election and the future potential impacts on the Congressional voting structure. Congressman Schweikert also discussed the complexity of surprise medical billing and drug pricing in the post COVID-19 congressional agenda.

SIIA Webinar Series SIIA has also developed a series of webinars which are free for SIIA members. Nonmembers may join for $125. Space will be limited so we encourage early sign-ups.

Upcoming webinars include:

SIIA Drug Pricing Task Force Update Webinar Tuesday, May 5th, 1:00-2:00 PM EDT SIIA members were able to discuss topics such as captive insurance issues and recent IRS actions, as well as the importance of healthcare cost and transparency.

With nearly 60% of Arizonians covered by a self-insured plan, the Congressman looks forward to continuing to work with the self-insured industry. Congressman Schweikert remains committed in protecting patient healthcare, working on solutions to the opioid crisis, and curbing burdensome government regulation to drive economic growth.

The Congressman encouraged members to reach out to his office directly with any concerns or questions during these unprecedented times.

Members of SIIA’s Drug Pricing Task Force will offer an update on the group’s work, focusing on best practice questions related to financial considerations, plan documents, and the roles and responsibilities of industry participants. Webinar panelists include Jeff Gavlick, Senior Vice President, Accident & Health, Tokio Marine HCC-Stop-Loss Group, Steve Kelly CEO, ELAP Services, Mary Catherine Person, President, HealthSCOPE Benefits, and Shaun Peterson, Vice President, Stop-Loss, Voya Financial Employee Benefits.

Jeff Gavlick Senior Vice President, Accident & Health Tokio Marine HCC-Stop-Loss Group

Mary Catherine Person President, HealthSCOPE Benefits

Steve Kelly CEO. ELAP Services

Shaun Peterson Vice President, Stop-Loss Voya Financial Employee Benefits

SIIA will be announcing future congressional town hall events in the weeks to come. If you have specific Members of Congress you would like to hear from, please contact Dakota Jackson at



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“Our clients have grown accustomed to Berkley’s high level of customer service.” - Broker

“The most significant advancement regarding true cost containment we’ve seen in years.” - President, Group Captive Member Company

“EmCap has allowed us to take far more control of our health insurance costs than can be done in the fully insured market.” - President, Group Captive Member Company

“With EmCap, our company has been able to control pricing volatility that we would have faced with traditional Stop Loss.” - HR Executive, Group Captive Member Company

People are talking about Medical Stop Loss Group Captive solutions from Berkley Accident and Health. Our innovative EmCap® program can help employers with self-funded employee health plans to enjoy greater transparency, control, and stability. Let’s discuss how we can help your clients reach their goals. This example is illustrative only and not indicative of actual past or future results. Stop Loss is underwritten by Berkley Life and Health Insurance Company, a member company of W. R. Berkley Corporation and rated A+ (Superior) by A.M. Best, and involves the formation of a group captive insurance program that involves other employers and requires other legal entities. Berkley and its affiliates do not provide tax, legal, or regulatory advice concerning EmCap. You should seek appropriate tax, legal, regulatory, or other counsel regarding the EmCap program, including, but not limited to, counsel in the areas of ERISA, multiple employer welfare arrangements (MEWAs), taxation, and captives. EmCap is not available to all employers or in all states.

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ENDEAVORS Broker/Advisor Compensation Arrangements – Implications for the SelfInsurance Marketplace Tuesday, May 12th, 2:00-3:00 PM EDT

An Update on Litigation Related to Reference Based Pricing (RBP) Strategies Wednesday, May 13th, 1:00-2:00 PM EDT

Broker/advisor compensation arrangements in connection with self-insured health plans have been the subject of heightened (sometimes heated) discussion over the past year.

This webinar will take a deep dive into the various compensation arrangements and the implications they may have for self-insured employers, TPAs, stop-loss carriers and other key service providers.

Laura Hirsch, Co-CEO, Aither Health will moderate, with panelists David Fear, Sr. Partner, Dickerson Insurance Services, Scott Haas, Senior Vice President, USI Insurance Services and John Kirke, President, Employee Benefits, CCIG.

Laura Hirsch Co-CEO Aither Health

David Fear, Sr. Partner Dickerson Insurance Services

Scott Bennett, J.D., CPC, Counsel, VP of Access Innovation at Maestro Health will provide further updates regarding several recent, current and prospective court cases related to reference-based pricing and hospital collections.

The list of new cases is short, which may be a good sign that compromise is preferred over conflict; however, some of the original cases are ongoing and have resulted in important courtroom opinions, excellent in-depth analysis and arguments, and ongoing challenges to an RBP strategy.

The legal landscape for RBP continues to evolve so if your company is engaged with this business practice, or considering it, this will be a very useful webinar.

Please note participation for this webinar will be limited so register for it right away if you want to listen live. Recordings of past webinars are available now to SIIA members at

Scott Haas Senior Vice President USI Insurance Services



John Kirke President, Employee Benefits CCIG

To register please visit

ENDEAVORS The same day that many states across the country began to institute ‘stay at home orders’ and require closure of non-essential businesses, captive owners across the country received approximately 150,000 ill-timed letters from the IRS, sent out based on 2018 disclosures. Keep in mind that many of these businesses are shut-down, inaccessible, or operating at diminished capacity, scrambling to help customers and employees while keeping their operations afloat.

In short, the IRS letter requires recipients to access and report information about their captive insurance program that might not be available to them because of the emergency, to report that information under penalty of perjury, originally giving a deadline of May 4, 2020, or face the risk of audit, however; SIIA is pleased that the IRS has announced an extension of the response deadline for the recent micro captive data letter from May 4th to June 4th. While this is good news for captive owners and their businesses, SIIA has been strongly advocating for the IRS to stand down on its unnecessary data collection and more appropriately focus its activities on narrowing guidance.

We continue to engage Congress on this issue and, more importantly, how captive insurance is helping America’s small- and medium-sized businesses when it is needed the most. Watch for additional exclusive SIIA reporting on this developing story.

MAY 2020




2020 MAY MEMBER NEWS SIIA Diamond, Gold & Silver Member News SIIA Diamond, Gold, and Silver member companies are leaders in the self-insurance/captive insurance marketplace. Provided below are news highlights from these upgraded members. News items should be submitted to All submissions are subject to editing for brevity. Information about upgraded memberships can be accessed online at For immediate assistance, please contact Jennifer Ivy at If you would like to learn more about the benefits of SIIA’s premium memberships, please contact Jennifer Ivy at 50


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Renalogic’s new hires:


Chad Ashbaugh joins Renalogic as a Demand Generation Analyst and will manage Customer Relationship Management software and essential marketing campaigns and initiatives. Chad has a strong technology background and a proven ability to execute successful marketing programs.

HIRES: ROBIN ANDERSON, CHAD ASHBAUGH, GREG CONRAD, JENNIFER HENRY AND MARK SCHAEFER PHOENIX, AZ -- Renalogic, the leader in comprehensive kidney care and dialysis cost containment, is pleased to announce the hiring of five new staff members across key areas of the company. Renalogic has bolstered its staff to meet client demand and manage expected future growth. The newest team members, Robin Anderson, Chad Ashbaugh, Greg Conrad, Jennifer Henry and Mark Schaefer, will strengthen Renalogic’s client services, sales and marketing functions.

“In the last year, Renalogic experienced tremendous growth across all services,” said Lisa Moody, CEO of Renalogic.

“We welcome our new team members and look forward to working together to build on our success as the leader in kidney care and cost containment.”



Robin Anderson, Renalogic’s newest Strategic Account Executive, will work to build and maintain relationships with key accounts and stakeholders. Robin joins Renalogic from Group & Pension Administrators, Inc. (GPA), where she managed nearly 30 selffunded employer groups. Greg Conrad and Jennifer Henry have joined Renalogic as Regional Sales Directors. They will join the current team in leading sales efforts across the US. Greg has more than 30 years of sales and operational leadership experience. He joins Renalogic from Total Wellness, where he was previously Chief Revenue Officer. Jennifer has worked in the insurance industry for more than 20 years. She brings an in-depth knowledge of cost containment, having helped to build market-leading products for several Fortune 500 companies. Mark Schaefer will lead Renalogic’s Marketing team and drive all internal and external marketing initiatives throughout the company. Mark is a seasoned strategic marketer who brings more than 15 years of experience in traditional and digital marketing, advertising, and project management. About Renalogic Renalogic has been the industry leader in dialysis cost containment for nearly 20 years and continues to innovate through the impact of The Renalogic Chronic Kidney Disease and Diabetes Management Program. We are not abandoning dialysis cost containment. We are revolutionizing it by simplifying the costs and clinical complexities of chronic kidney disease to make a positive impact and reduce the dialysis incidence rate in every population we touch. Every chronic condition leading to kidney disease is manageable and even preventable when identified early. Visit

NEWS HM INSURANCE GROUP FURTHERS REACH WITH TWO NEW SALES DIRECTORS, JOHN MCCABE AND JAN GOEHRING PITTSBURGH – In an effort to expand sales opportunities and foster relationships across diverse channels of the stop loss market, HM Insurance Group (HM) recently brought on two new sales directors with business-specific roles. John McCabe joined HM as director, Blue Plan Partnerships. In this position, McCabe is responsible for growing relationships with current Blue partners and pursuing new Blue partnerships nationally.

Jan Goehring was hired as director, Sales. In this newly created position, Goehring is responsible for growing HM’s reference-based pricing business, generating level funding activity and working on stop loss business with producers in the Midwest who do not already have a relationship with an HM Regional Sales office.

McCabe comes to HM from Kirr, Marbach & Company, LLC, where he served as director, Business Development. Prior to that, he was a managing director of business development at Fifth Third Asset Management, which followed a role as director of National Accounts for Highmark Inc.

Goehring brings more than 20 years of industry experience in sales and business development to the role. He comes to HM from Advanced Medical Pricing Solutions (AMPS) where he served as regional vice president, Business Development.

He also has worked for CIGNA, Mercer and other industry leaders. McCabe has a Bachelor of Arts degree in Political Science from Colgate University. He is based in HM’s Pittsburgh Regional Sales office.

Prior to that, he was a local sales leader for Willis Towers Watson. He also has worked for Voya, Marsh and other

He brings more than 20 years of industry experience in management, sales, consultant/broker relations and major account management to the role.

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industry leaders. Goehring has a Bachelor of Arts degree from the University of Texas at Austin. He is based in HM’s Houston Regional Sales office.

HM INSURANCE GROUP ANNOUNCES NEW SALES DIRECTOR FOR NEW ENGLAND REGION Nikki Fisher-Quittmeyer recently joined HM Insurance Group (HM) as director, New England Regional Sales. In this role, she is working to grow and maintain the HM Stop Loss book of business in the company’s New England territory, which serves Connecticut (except for Fairfield County), Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. Fisher-Quittmeyer comes to HM from Aetna, Inc., where she held national and regional sales positions of increasing responsibility since 2008 and most recently served as regional vice president, sales, for Meritain Health, an Aetna Company. Fisher-Quittmeyer brings more than 15 years of experience in sales, client management, employee benefits and insurance to the position.

HM INSURANCE GROUP ANNOUNCES CHRIS SLEZAK AS NEW HOUSTON REGIONAL SALES DIRECTOR Chris Slezak has joined HM Insurance Group (HM) as director, Houston Regional Sales. In this role, he will work to grow and maintain the HM Stop Loss book of business in the company’s Houston territory, which includes southern Texas and Louisiana.


Slezak comes to HM after 13 years with OptumHealth, where he served as a regional sales director responsible for the development and maintenance of new and existing broker and TPA relationships for stop loss in Texas, Oklahoma and Missouri. He also previously worked as a regional sales manager at Tokio Marine HCC and has TPA experience from his time at Smith Administrators, where he opened the Atlanta office and was tasked with building the company’s footprint in that region. Bringing more than 20 years of industry experience to HM, Slezak has a Bachelor of Science degree in Finance from High Point University. About HM Insurance Group HM Insurance Group (HM) works to protect businesses from the potential financial risk associated with catastrophic health care costs. The company provides reinsurance solutions that address risk situations confronting employers, providers and payers. A recognized leader in employer stop loss, HM also offers managed care reinsurance nationally. Through its insurance companies, HM Insurance Group holds insurance licenses in 50 states and the District of Columbia and maintains sales offices across the country. Contact Jennifer Mahan, Marketing & Communications Consultant, at jennifer.mahan@ and visit

NEWS ED ZWICKER JOINS VĀALENZ AS VICE PRESIDENT, INFORMATION TECHNOLOGY PHOENIX, AZ – Valenz™ is pleased to announce that Ed Zwicker, MBA, has joined the team as Vice President, Information Technology. Based in Philadelphia, Zwicker brings 35 years’ experience in design, development, and implementation of highly robust data systems and business intelligence applications. He carries out innovative IT initiatives that add value to his company’s primary business, creating and executing data strategies that align with business goals.

“We are thrilled to have Ed join the senior leadership team,” said Rob Gelb, Chief Executive Officer of Valenz, a leading innovator for data-driven solutions that reduce medical claim costs and promote quality healthcare.

“Ed is a highly accomplished IT professional who has deep experience in achieving exceptional business results for his clients. He is well positioned to provide the vision for our technology teams and foster partnerships between IT and business.” Most recently, Zwicker served as Vice President, Client Delivery for Integress, Inc. A mentor and trusted leader who proactively drives projects and programs, he also has held IT leadership roles at such organizations as Philadelphia Insurance Companies, Cigna and Penn Mutual. “Valenz is an amazing company, and I’m honored to become part of the team,” Zwicker said. “I look forward to working alongside my team members and our platform partners as we continuously innovate to meet the diverse needs of every client.

Work with a company that makes connections.

Choose coverage that aligns you with experience, market insight, data-driven decisions and accessible experts.

When you work with HM Insurance Group, you can connect with thought leaders and smart ideas steeped in regional knowledge and backed by financial stability. We build relationships – nationwide and for the long-term – ever mindful of the evolving health care landscape and committed to protecting the financial well-being of our clients from the impact of catastrophic claims. Find more on



Coverage is underwritten by HM Life Insurance Company, Pittsburgh, PA; Highmark Casualty Insurance Company, Pittsburgh, PA; or HM Life Insurance Company of New York, New York, NY.

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MAY 2020


NEWS Together, we will accomplish great things through the Valenz ecosystem and our shared promise of smarter, better, faster healthcare.” About Valenz Through a complete health administrative ecosystem, Valenz connects cost and quality data on a single source, end-to-end analytics platform for smarter, better, faster healthcare. Valenz solutions integrate data from comprehensive care management services (Valenz Care), high-value provider networks (Valenz Access), claim flow management (Valenz Claim), and solutions for payment integrity, revenue cycle management and eligibility compliance (Valenz Assurance) into the ecosystem. Visit Valenz is backed by Great Point Partners. About ProServe Health Informatics Planwatch, a product of ProServe Health Informatics, examines historical, current, and future health plan dimensions, integrates, combines and compares pharmacy and medical costs, identifies cost drivers and performance metrics, and provides tested solutions to minimize plan expenditures. Visit About Great Point Partners Great Point Partners (“GPP”), founded in 2003 and based in Greenwich, CT, is a leading healthcare investment firm, currently with approximately $1.8 billion of equity capital under management and 28 professionals, investing in the United States, Canada and Western Europe. Visit


GOLD MEMBERS STEPHEN MANZELLI JOINS AMPS AS SVP OF REGIONAL SALES ATLANTA – Advanced Medical Pricing Solutions (AMPS), the pioneer in cost containment for the self-insurance industry, today announced that 30-year health insurance veteran Stephen Manzelli has joined the organization as senior vice president of regional sales. In this role, Mr. Manzelli will manage and support the AMPS regional sales team across the U.S. In addition he will be responsible for providing an efficient cross-sales support mechanism between his team and the AMPS enterprise sales team, as well as creating new enterprise sales opportunities in market segments such as health systems and Association Health Plans (AHPs).

“I have known and worked with members of the AMPS team for more than a decade, so I have seen first-hand what they bring to the industry,” said Mr. Manzelli. “The cost of healthcare continues to skyrocket at unsustainable levels, and we need innovative solutions to help alleviate the problem. AMPS has a relevant, focused cost management solution set and approach that makes sense for a wide range of customers. I’m looking forward to working with the team and am happy to be joining such a dynamic, professional organization.” Mr. Manzelli comes to AMPS after serving as CEO of SSMMC, where he was responsible for overseeing the consulting firm and providing strategic guidance for customer growth and market engagement with insurance carriers, third party administrators, health systems, associations and large employers/Taft Hartley groups. Concurrent with this position he was also a co-founder of Inventavis, a consulting firm serving a similar market. His sales experience includes positions as vice president, sales and client services at POMCO, senior vice president of sales at HealthNow Administrative Services and senior executive – client development at JLT Services Corporation. With Mr. Manzelli’s arrival with AMPS, he and Inventavis co-founder Larry Thompson— who is now the Chief Strategy Officer and Chief Revenue Officer for AMPS—will externally leverage the acquisition of Inventavis by AMPS so that AMPS can now fully

NEWS deploy a healthcare consultancy arm in conjunction with its already formidable array of high impact, value-added services. “Cost containment is a hot-button item for everyone in healthcare, but especially for those on the health insurance side,” said Kirk Fallbacher, CEO, AMPS. “Steve Manzelli brings a deep understanding of the market and its challenges. He has seen many changes within the industry and knows how to develop solutions for clients that make sense. We are excited to add his proven expertise and highenergy approach to our growing team, and furthermore to offer a broad range of customers the consulting expertise that Inventavis has to offer.”

AMPS’ addition of Mr. Manzelli follows the continued expansion of its executive team, which recently added several healthcare and health insurance industry veterans to its leadership group. The addition of these new experts, who together bring decades of healthcare experience in bending the cost curve of healthcare, will help AMPS greatly enhance its ability to serve self-funded employer groups, broker/consultants, reinsurers, thirdparty administrators, health systems and AHPs.   About AMPS Advanced Medical Pricing Solutions (AMPS) provides market leading healthcare cost containment services for self-funded employers, public entities, brokers, TPAs, and reinsurers. AMPS mission is to help clients attain their goals of reducing healthcare costs while keeping members satisfied with quality healthcare benefits. AMPS leverages 16 years of experience in auditing and pricing medical claims to deliver “fair for all” pricing both pre-care and post-care. AMPS offers innovative dashboards and analytics to provide clients with insights based on Plan performance. Visit

MAY 2020


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NEWS SILVER MEMBERS ACS BENEFIT SERVICES ANNOUNCES NEW GENERAL COUNSEL, RONALD H. MORRIS, JR. Winston-Salem, NC – ACS Benefit Services announced that Ronald H. Morris, Jr., has joined the ACS executive team as General Counsel, reporting to Chief Executive Officer, Kari L. Niblack. In this role, he oversees the company’s legal and government affairs and leads ACS’ compliance team. With nearly a decade of experience in healthcare law, Morris comes to ACS from RevClaims in Jackson, Mississippi, where he served as a Senior Supervising Attorney responsible for leading a division of over 50 employees in increasing multiple hospital systems’ revenues and mitigating any potential litigation risks.

Additionally, Morris has utilized his expertise as a leader in healthcare law by authoring multiple business leadership articles, which have been published by journals and sites such as Becker’s Business Review and LinkedIn Pulse. “Throughout his impressive legal career, Ron has proven himself to be the embodiment of persistence and dedication,” said Niblack. “His vast knowledge and experience navigating the complexities of provider revenue streams, complex litigation and compliance will be a tremendous asset to ACS as we continue to grow and push the boundaries of innovation within the employee benefits space. We are delighted to welcome Ron to the ACS executive team!”

About ACS Benefit Services Founded in 1982, ACS Benefit Services was formed on the realization that there needed to be better benefit solutions and health plans available in the marketplace. Since then, ACS has grown to be a leading third-party administrator by focusing on the future of the industry, creating long-term solutions and predicting the benefit administration needs of our employer groups. Contact Kari L. Niblack, JD, SPHR, Chief Executive Officer at and visit

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SIIA 2020 BOARD of directors & committee chair ROSTER




David Wilson President Windsor Strategy Partners, LLC Princeton, NJ

Kari L. Niblack, JD, SPHR CEO ACS Benefit Services Winston-Salem


Jeffrey K. Simpson Attorney Womble Bond & Dickinson (US) LLP Wilmington, DE

CAPTIVE INSURANCE COMMITTEE John R. Capasso, CPA, CGMA, PFS President & CEO Captive Planning Associates, LLC Medford, NJ


Peter Robinson Managing Principal EPIC Reinsurance San Francisco, CA

Mike Ferguson SIIA Simpsonville, SC

Robert Tierney President StarLine East Falmouth, MA

TREASURER AND CORPORATE SECRETARY* Gerald Gates President Stop Loss Insurance Services AmWins Worcester, MA *Also serves as Director

SIEF BOARD OF DIRECTORS Nigel Wallbank Chairman Heidi Leenay President Freda Bacon Director Les Boughner Director Alex Giordano Director


Thomas Belding President Professional Reinsurance Marketing Services Edmond, OK Laura Hirsch Co-CEO Aither Health Carrollton, TX Lisa Moody President & CEO Renalogic Phoenix, AZ

GOVERNMENT RELATIONS COMMITTEE Steven B. Suter President & CEO Healthcare Management Admtrs., Inc. Bellevue, WA CHAIR, INTERNATIONAL COMMITTEE Liz D. Mariner Ford Senior Vice President Re-Solutions, a Risk Strategies Company Minneapolis, MN CHAIR, SIIA FUTURE LEADERS COMMITTEE Brady Bizarro Director, Healthcare Attorney The Phia Group, LLC CHAIR, TPA BEST PRACTICES TASK FORCE Jerry Castelloe Principal Castelloe Partners, LLC CHAIR, WORKERS’ COMP COMMITTEE Shelly Brotzge Regional Underwriter, Group Self-Insurance Midwest Employers Casualty

SIIA new members MAY 2020

REGULAR CORPORATE MEMBERS Brett Wilkinson President/Chief Sales Officer ClaimChoice, Inc. Warren, MI Julie Bartl President Johnson, Kendall & Johnson, Inc. Newtown, PA

EMPLOYER CORPORATE Ted Cadmus Vice President, Carrier Relations Quantum Health Columbus, OH

MEMBER Leslie Anderson Health Claims and Benefits Manager New England Healthcare Employees Welfare Fund Hartford, CT

MAY 2020



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